Embezzlement alleged in Grand Isle County

Authorities say they are investigating a series of embezzlement allegations that could exceed $100,000, including from the Grand Isle County courthouse, pictured, and the Champlain Islands Parent-Child Center in South Hero.(Photo: EMILY McMANAMY/FREE PRESS)Buy Photo

NORTH HERO – Authorities say they are investigating a series of embezzlement allegations that could exceed $100,000, including from the Grand Isle County courthouse and the Champlain Islands Parent-Child Center in South Hero.

Grand Isle County Treasurer Theresa "Terri" Blow has been placed on an unpaid leave of absence from her government job, Joanne R. Batchelder, one of the two elected assistant judges for the county, told the Burlington Free Press.

No criminal charges have been filed, but state and federal law enforcement are investigating.

Repeated attempts to reach Blow, who is in her mid-60s, were unsuccessful. She did not answer her home phone for the past two days or come to the door at her Station Road home on Thursday.

Blow works as an independent bookkeeper and has been the appointed part-time county treasurer for about eight years. She also is listed as a certified public notary.

Criminal defense lawyer Mark Kaplan of Burlington, whom Blow recently retained, said it was too early to comment on the case.

"We will deal with it when we learn more," Kaplan said.

A forensic audit of county finances and further investigation revealed a possible loss of about $40,000 for county taxpayers, Assistant Judge Sherri Potvin said.

"We ran budget reports that showed we had plenty of money in our accounts, and comparing them to bank statements, they did not match up," Potvin said. The judges uncovered the problem in late March.

The county paid Blow an annual stipend of about $5,000 to process the weekly payroll and pay other county bills, Potvin said. Blow typically worked a few hours each Tuesday afternoon.

The Parent-Child Center, a private entity, appears to have lost about $63,000 through about 70 forged checks, according to David C. Carter, the chairman of the center's board of directors. The center, which offers daycare, preschool and after-school programs, had hired Blow to keep the books.

Buy Photo

Authorities say they are investigating a series of embezzlement allegations that could exceed $100,000, including from the Grand Isle County courthouse and the Champlain Islands Parent-Child Center, pictured, in South Hero.(Photo: EMILY McMANAMY/FREE PRESS)

"The Parent-Child Center is fully functioning, and we have money in the bank and are fully staffed," Carter said. He said the recent sale of a building in Alburgh has helped provide a cushion, so there was no interruption of services.

Carter said the checks in question were written to Terri Blow or to Prowood Inc., a carpenter business operated by her husband, Michael R. Blow. Repeated attempts to reach him also were unsuccessful.

Theresa Blow was listed as the secretary, the treasurer and a director for Prowood Inc., according to an annual corporation papers filed in August 2013 in the office of Secretary of State Jim Condos.

About one week after Terri Blow was suspended from her county job, new corporation papers were filed for Prowood showing she was no longer associated with the company. Michael R. Blow was listed as president and the sole director in the April 3 filing.

Carter said most of the questionable checks have been written since Aug. 7, 2012. He said at least one check in question goes back to October 2010.

Carter told the Free Press his law firm in South Hero also lost $3,400 in a four-month period through five checks written out of his operating accounts.

"None of the trust accounts were touched," Carter said as he sat in his South Street office on Thursday. Blow worked for Carter as a secretary.

Carter, like the assistant judges, expressed dismay about the situation.

"Terri had worked for me for about 15 years. She was a trusted employee," Carter said. He said she sent him an email on March 27 that said "I'm sick and not coming in" and he hasn't seen her since.

The investigation

Batchelder and Potvin, the assistant judges, filed a complaint in late March about suspected financial discrepancies in the county books, Grand Isle County Sheriff Ray Allen said.

Allen said because the allegations centered on a portion of the Grand Isle County government, he quickly referred the case to the Vermont State Police to avoid any appearance of a conflict of interest. The Sheriff's Department provides primary law enforcement in the five-town county.

State Police Detective Sgt. Michael Aamodt from the St. Albans barracks has been investigating the case and recently brought in the FBI, which alerted the U.S. Attorney's Office in Burlington.

As the early investigation into the county books unfolded, leads also showed possible problems at the Parent-Child Center in South Hero and at Carter's law firm, officials said.

Buy Photo

Authorities say they are investigating a series of embezzlement allegations that could exceed $100,000, including from the Grand Isle County courthouse and the Champlain Islands Parent-Child Center (pictured) in South Hero.(Photo: EMILY McMANAMY/FREE PRESS)

The Parent-Child Center's website notes its programs include Head Start and Early Head Start, which are federally funded programs to promote school readiness of children 5 years old and younger.

The Parent-Child Center also is a vendor for the Grand Isle Supervisory School Union, which uses federal, state and local tax dollars to contract for services, said John Gifford, the business manager for the school district.

Carter said new financial procedures have been put in place at the Parent-Child Center.

Grand Isle State's Attorney David Miller has disqualified himself from the case because he sits on the governing board of the Parent-Child Center on South Street.

The Vermont Attorney General initially took over the case, but now the U.S. Attorney's Office in Burlington is taking the lead.

Assistant U.S. Attorney Gregory Waples said he was aware that the FBI had been notified about the allegations, but it was too early to comment.

Judge Potvin said the county believes it caught the problem early. She said the county opted to go back about 2½ years for the recent forensic audit.

It was unclear if the FBI and state police planned to go further back in time with the investigation.